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Equity Residential reports YOY normalized FFO dip, tightens FY'16 guidance range

Equity Residentialon April 26 reported a year-over-year decline in normalized FFO per share, tightenedits full-year 2016 normalized FFO guidance and issued new second-quarter guidance.

For the first quarter, FFO came to $179.3 million, compared to$303.0 million in the first quarter of 2015, the company said in a news release.FFO available to common shares and units totaled $178.5 million, or 47 cents pershare, compared to $299.4 million, or 79 cents per share, a year earlier.

During the quarter, the company completed the $5.37 billion of 23,262 apartment units tocontrolled affiliates of Starwood Capital Group and retired roughly $2.0 billionof existing debt. The company incurred roughly $112.4 million in prepayment penaltiesassociated with the debt extinguishments.

Normalized FFO, which adjusts for such factors as property acquisitioncosts, debt extinguishment gains or losses, and gains on sales of nonoperating assets,totaled $290.3 million, compared to $299.9 million in the year-ago quarter. NormalizedFFO available to common shares and units came to $289.5 million, or 76 cents pershare, compared to $299.0 million, or 79 cents per share, in the year-ago quarter.

The S&P Capital IQ consensus FFO-per-share estimate for thefirst quarter was 76 cents.

In the news release, President and CEO David Neithercut saida return to more normal, seasonal trends will likely cause same-store revenue growthto fall "modestly short" of the company's original guidance midpoint for2016.

The company tightened its full-year 2016 normalized FFO-per-shareguidance to a range of $3.05 to $3.15, from an earlier range of $3.00 to $3.20.For the second quarter, the company said it expects normalized FFO-per-share inthe range of 74 cents to 78 cents.

The S&P Capital IQ consensus FFO-per-share estimates forthe second quarter and full year 2016 are 78 cents and $3.14, respectively.

In the first quarter, same-store NOI increased by 6.6%, the companysaid.

During the quarter the company sold, for $412.5 million, WoodlandPark, a 1,811-unit property in East Palo Alto, Calif. It also sold, for $390.0 million,River Tower, a 323-unit property in New York City.

During the quarter, the company acquired a 61-unit property inSeattle for roughly $25.8 million; a 298-unit property in Los Angeles for roughly$98.6 million including the assumption of a $42.8 million mortgage; and a 120-unitproperty in Brooklyn, N.Y., currently in the final stages of lease-up, for roughly$79.7 million.

On April 1 the company sold, for roughly $63.3 million, its interestin the management contracts and related rights for its military housing businessat Joint Base Lewis McChord in Washington State.